>> we have been talking with michelle fitzgerald at palgrave macmillan. we are here at bookexpo america which is the book publishing industry's annual convention in new york city. >> stephen moore co-author of "return to prosperity" and robert frank author of the darwin economy debate the merits of wall street. this event set up by the mock trial -- investment broker peter shaft and an annual libertarian conference. it's about an hour and 10 minutes. [applause] >> thank you. >> hi everybody. are you ready for some wall street on trial excitement? because i have got to gavel this court now comes to order.

that's right for kobbe ladies and gentlemen and members of the jury, the diverse chair -- cherry. we are gathered in a great sovereign state of nevada to decide the fate of wall street as an american institution. in this hearing we hope to discover it's on that balance wall street as a financial institution is worthy of trade and respect to the general public and that taxpayers of this great nation or should it be confined to the dustbin of history as a barbarous relic of poker capitalism? investment banks, brokerage firms, hedge funds, money managers in the financial services industry serve the public interest or is it a nuisance that does more harm than good and therefore shouldn't be punished and severely regulated and taxed and perhaps even nationalized?

in the past year we have seen spontaneous protests across new york and other major cities in the world under the general banner occupy wall street. before this court the prosecution will attempt to show that in sympathy with these protesters wall street has tragically shifted from being a valued, respected and vital steward of capital investment and entrepreneurship to a perverse shell game of greed, corruption, scandal of, excessive risk-taking, insider trading, executive -- excess executive pay, special tax breaks and pencino like gambling, fun, that lavishes benefits on partners insiders and big business at a time when main street is suffering. as a result, the prosecution will try to demonstrate that wall street has been a destabilizing sector of the american and world economy and is is partly not wholly responsible for the latest financial crisis and unfairly

build out private taxpayers. in short wall street is no longer beneficial model of free enterprise capitalism. we have brought before this court mr. stephen moore, member of the prestigious editorial board of "the wall street journal," defender of financial institutions everywhere and the conscience of wall street itself. mr. moore, will you please stand? very good. you are already wonderfully taking directions. [applause] let's hear it for his standing. you as a representative for the financial services industry and wall street in general have been accused of greed, corruption, excessive compensation, social inequality, unnecessary risk-taking not paying your fair share of taxes and causing the financial crisis of 2008. how do you and your supporters plead? >> not even close to being guilty or on her. >> really? alright well we are going to proceed with a five-minute opening statement by the prosecuting attorney mr. robert

frank. mr. robert h. frank is the henry johnson louis wiki professor cornell university of the winner-take-all society darwin economy. he's also the co-author of the ben bernanke popular textbook the principles of economics. he earned his ph.d. from uc berkeley. [laughter] and was a peace corps volunteer in rural nepal. after the opening statements each attorney will call to witnesses who will be subject to cross-examination and then each site will make closing remarks. afterward the jury will rule on the case and if the defendants are found guilty, i will impose judgment. let me give a few instructions to the jury. are you listening? very good. you will listen very carefully to the opening statements in the witnesses and at the end of the hearing he will be required to determine whether there is

sufficient evidence beyond a reasonable doubt, reasonable doubt, that mr. moore and his wall street supporters are responsible for public malfeasance. oh that's great. mr. frank, you may begin with your opening statement. [applause] >> go go-go ahead. >> thank you very much judge canady. it's an honor to be able to present the case before this distinguished group and i want to say that we have a very mixed bag of opinions on our side of the issue. i'm a wretched democrat and my two principle witnesses are registered republicans. we come at this case in a way that you might not have anticipated from our affiliations. you will hear john mackey decried greed and malfeasance among wall street executive says somebody coming from the political right. you more likely would expect a message like that to come for

mr. combs of the fox network. speak of box. c. i won't try to guide the case but i regarded the core issue which is that wall street may have committed malfeasance and be guilty of greed, but those are things we expect after all from enterprise, the invisible hand theory does not require that executives be altruistic or the whole theory is predicated on the notion and this is the theory that animates all of your faith and enthusiasm for free markets that under certain conditions we will get very good results for society as a whole from leading markets do what they do. adam smith however didn't believe that markets give you good results no matter what. anybody doubts that need only go to somalia and watched truly free markets and action. smith argued that markets work

12 when certain preconditions were in that. there were certain institutional preconditions that had to be met. there were traits of character that were expected to participate in the markets. in this format, when we have the right institutional framework of property rights, laws and regulations and the right people into positions, we could expect in many cases very good results from people seeking their own ends of the marketplace. it's not from the butcher or the baker or the candlestick maker or anyone else. he wrote that the book for our dinner, guess we wouldn't look for our dinner from the candlestick maker in any event. >> no judgment. >> but we looks to them for our dinner because we will serve their interest to provide it. it may be correct to observe that wall street is greedy but that is almost beside the point. we expect that in executives. the real law in the wall street

industry has to do with the loss that shape their behavior. those laws push them to act in ways that our side will argue had made wall street and unambiguous albatross around the neck of the nations economy. it wasn't always believed to be so. alan greenspan, who is familiar to members of his audience and he would say very enthusiastic supporter of financial deregulation, said in 2005, increasingly complex financial insurance have contributed to the development of a far more flexible, efficient and hence resilient financial system than the one that existed just a quarter-century ago. when he spoke those words, there was clear evidence to the contrary although many people suspected that he was wrong about that point. since then of course we have seen the financial industry blow up in our faces and many poor people are receptive to the

notion that the rules of the financial services industry were not off play crafted. when you press industry observers to name innovations that come from the financial services industry, that is to say useful innovations, many of them seem nonplussed on reflection. their responses contain scarcely a single item in common. that would be atm machines, the one useful innovation that has come out of this financial service. the the other innovations, chiefly financial derivative instruments, are mainly cnas incheon metz whereby insiders are able to stop risk on on suspect and bystanders and often create catastrophic instability for the financial system as a whole. the way we got here was by a very hasty system up to regulatory steps in the 1980s.

those steps our side will argue led us to a much worse spot and it would be much better for the country as a whole if it sheds this albatross. >> thank you very much mr. frank's. [applause] now we will hear from the defending attorney in this case. mr. moore is the distinguished member of the wall street journal editorial board and authored many books including how barack obama is bankrupting the u.s. economy co-authored with art laffer. reached a poor safety and prosperity and "return to prosperity." how america can regain its economic superpower status. he received his m.a. from george mason university and he's a strong advocate of this flat tax, social security privatization and free trade. he is considered one of the premier supply-side economists in the united states. mr. moore will you give us your opening statement? >> thank you your honor. thank you members of the jury.

i would like to start by saying that i believe this trial is a farce and a miscarriage of justice. i work for "the wall street journal" so of course i'm going to defend wall street. i would submit that our defense your honor boils down to this. it is the wrong people and the wrong institutions that are being put on trial here this afternoon. now let me start by saying, by making some admissions about some of the mistakes that were made by wall street. we are all angry about what happened in 2008 and 2000 the massive losses. we are all angry at the excesses of wall street and i will acknowledge the fact that mr. frank made that there was excessive paid to ceos, that there were parties held by many of the members of wall street, that there were criminals and crooks like bernie madoff, by the way they are in jail like

they belong. but i think it's important to understand that wall street plays an incredibly constructive role for our economy. in fact i would say that wall street is the central nervous system that provides the seed capital that makes our 15 trillion-dollar free-market economy operate and grow. what does wall street to? what makes it such an integral part of our economy? a lot of people can answer that question and i would simply say the role that it plays your honor and members of the jury is to allocate capital, scarce capital, to the highest value-added companies so that they can grow and create jobs and create profits. i would submit that despite all of the mistakes by wall street and by the way not just by wall street. i would submit everyone in this room, we all make mistakes. we all lost money. we all got carried away in the frenzy of the runaway markets in

the late 2000. but, in the last 30 years we would all have to agree that wall street has done a tremendous job of funding for vital companies in this economy. thinking of companies like apple and steve jobs and thinking of companies like microsoft and bill gates and thinking of walmart and home depot incorporated google. without wall street, if we put wall street in jail and shut wall street down what we are going to do is deny the funding and the essential capital for the next generation of googles and the next generation of walmart's and home depots that not only provide wealth for investors but also creates hundreds of thousands if not millions of jobs. i would submit that no other country in the world has a more well-functioning capital system and financing system than the united states of america and that happens with the investors

that wall street. we should remember that. it's extremely important for economy. who is culpable and who is guilty and who should be on trial here? and who is responsible for the $11 billion in losses? let me tell you who i think that should be. on trial should be barney frank. barney frank -- [applause] the man who said we should roll the dice on the housing market and we did world that guys and americans lost trillions of dollars. i would submit that chris dodd, the former senator from connecticut, should be on trial for having cozy relationships with the very types of people like countrywide that he was supposed to be regulating. i would submit that fannie mae and freddie mac should be on trial for providing 100% guarante, taxpayer backed guarantees for mortgages and ladies and gentlemen of all the bailouts we did, the two

institutions that never paid back any of the money that they lent them as taxpayers were fannie mae and redding. they should be on trial here. i would submit that they 435 members of the united states house of representatives that voted for a 700 billion-dollar bailout, they should be on trial here. [applause] and so should the people who voted for the $800 billion failed stimulus plan and most importantly nancy pelosi should be on trial for running up the national debt by $5 trillion in putting our nation in financial peril. i would submit that s&p and moody should be on trial for giving aaa moderating to mortgage-backed security. these are the people ladies and gentlemen that should be on trial. i would submit to you that -- should be on trial for the money policies that de peyster currency. don't put wall street on trial.

put government on trial. they are the ones who are guilty. they are the ones that lost our money and they are the ones who should be responsible. [applause] thank you yonah. >> all i'm saying is if they were the jury you would be in so much trouble right now. but they are not. they are. alright thank you very much mr. moore. take a deep red. mr. frank are you ready to make it rain in here? what you like to call your first witness? >> is time for us to hear from john mackey the president of whole foods. [applause] >> mr. mackey would you please take a seat? we would like you to take an oath to tell the truth, the

whole truth and nothing but the truth. would you like to swear on the wealth of nations? /kho do you swear to tell the truth, the whole truth and nothing but the truth? >> i do. >> can i ask you one thing? have you seen the price of a regelach lately? [laughter] it's so expensive. >> that was good. you are pretty funny. [laughter] i just need to say one thing. on mr. frank you need not insult me by calling me a registered republican. i have only voted republican one time in 40 years and i deeply regret that decision. i am apologetic for the miscalculation. what i did recognize you to be with somebody with a sincere presentation of the magic of free markets and a very deep libertarian sentiment.

>> okay, work it out later on. let's get on with the trial. >> yes that would be especially interesting to hear your perspective on adam smith's notion that character counts in the marketplace and that we expect certain things of business leaders other than that they ruthlessly try to take as much out of the enterprise as humanly possible. you have some experience or thoughts you want to add? >> are you asking me whether you think businesspeople should be ethical? >> that would be a starting question for you. do you think a business owner has a responsibility to obey the law even? if you can't get caught than a business would do better by not following the law? where's the greater responsibility for us to the shareholder of a lot xp you should make a law. >> the law is unjust is one of the members of our audience. >> there is no controlling the the --

go ahead. >> if if you see things that trouble you on wall street what would they be? >> the way i siege business is, i see businesspeople is basically the heroes in this world. business people or the value creators. [applause] we create value for customers, for employers, for suppliers, for investors and for our communities and indeed for the whole world. it does troubling me sometimes that i think wall street forgets it is a value greater. i do think sometimes -- my company has been public for 20 years and i've been dealing with wall street for 20 years. is a little bit of a love-hate. i do believe they have created value but i think sometimes they have forgotten why they exist, what their purposes, what they are supposed to be doing in that troubles me. what about in the domain of executive compensation? i know you have strong views about that in terms of your own business.

do you think the people that had up financial firms on wall street on the right track there? >> it think ultimately those decisions need to be made by their board of directors and shareholders to elect the board. sometimes i think there may be not doing a good job in corporate governance there but i don't think that is something the government should be involved in but i do think sometimes some of those salaries seem to be higher than market rates. >> and, is that something for collective action or do you think the government hands off profits like that? >> asked him to define collective action. >> the judge wants me to ask you -- [inaudible] >> i don't think i'm supposed to ask a question. >> you will be fine. [laughter] >> i do think it requires collective action but i think

reforms really need to come from within the business community, from within the shareholders of companies, within the awards of directors. they're the ones ultimately have to be responsible and i do think they are not always doing their job well and basically a lot of governance reforms i've seen i don't like all of them but i think a lot of them are very positive. >> the last question i want to ask you about is the fundamental distinction between the kind of business you run in the kind of business as businesses we see on wall street. so just imagine yourself in the role of maker. that is one of your roles at any rate. when you sell a loaf of bread, the price the consumer pays you for that is a reasonably close track on the value the consumer receives or else the consumer would go elsewhere. it's enough to cover your costs so that is one of the preconditions adam smith describes for market incentives

and social incentives to be in close alignment. so that seems meant for your business. do you think the condition is met as well for the financial services industry? >> not always, no. >> so for example, if i financial services firm is confronted with a decision whether to advance in millions of dollars in computer equipment to make a forecast two minutes earlier -- >> you have no more time. >> no more timed? >> he can answer quick we. >> i will give an example. when my company went public in 1992 with its official public offering there was no price competition on wall street. they were taking a 7% cut of every dime they raised and that was not, you couldn't go out and negotiate 6%, you could negotiate 5%. i thought that was a type of

price dilution. as far as i know that is still kind of the rules they're. >> alright, very good. >> thank you very much. >> your witness? [applause] >> he mr. mackey, he mentioned the housing bubble and i wonder looking back in what happened with the massive overinvestment with housing that happen in this country, who do you think is mostly responsible for that happening? obviously wall street took a lot of excessive risks and excessive loans but would you say that this is a result of wall street or would you say that when the federal government provided 100% taxpayer guarantees, that these mortgages ready -- many of them which were incredibly flimsy, when the government is telling

these tanks that they will provide 100% guarantee, who do you think is more culpable for creating this, fannie wright -- fannie mae or the bank's? >> i think both are guilty but if you're asking me i think fannie mae is of little bit more. fannie mae is a little bit more. >> so maybe fannie mae should be be -- speak you set the parameters. >> the second question i have for you, do you believe that the ceos are overpaid? is that your assessment? >> i mean these types of decisions ultimately, you can look from the outside. their compensation seems to me to be at times excessive, yes. >> let me concede the point that many ceos of companies are overpaid. then the question becomes who do you think in your opinion is responsible for that or that is to say would you favor the government coming in and telling

companies what they can pay their ceos or is that a matter for boards of directors and shareholders? >> it's a matter for boards of directors and shareholders. >> the top 1%, are you in the top 1% of earners in this country? >> i plead guilty. >> you plead guilty. so we have heard, a lot of this condemnation of my clients is based at the fact that a lot of these people got rich just the same way you did. you got rich and people on wall street got rich. is it a crime to be rich in this country? >> it appears that it might be becoming so. [laughter] >> so, can i ask you if you make over $1 million a year? >> do i have to answer these questions? [laughter] >> let me rephrase the question. let me rephrase the question. there are people in congress who

feel that they want to be so punitive to my clients that they want to basically have a law that says no one should make over $1 million. is that one kind of thing that you would favor a? >> i think it would be very bad for the national basketball association. [applause] >> very well put. >> which leads me to a question. lebron james can make 40 to $50 million a year to play basketball, is it excessive to pay a ceo of a major company that employs hundreds of thousands of people with millions of dollars of assets, 40 or $50 million? >> not if he is lebron james. [laughter] >> very well put. finally and this is maybe the most important. you started whole foods how many years ago? >> about 32 years ago. >> how did you get the initial financing in the initial capital to grow your business?

>> i begged everybody i knew. >> did you ever go to wall street? >> to start the business? >> ever. >> course but not when i started. >> here's my question. if they shut these people down, would you agree that it would be extraordinarily difficult and almost impossible for businesses like yours that hire tens of thousands of people to get the money that they need to grow their business? now look, how were we going to run a capitalist free market system if we don't have loans? >> clearly we need ways to raise capital. that is the purpose that wall street has. unfortunately it doesn't always follow that purpose and that is why so many people are angry with with the. wall street's financial community need to remember what their purposes and why they exist and i think sometimes they have forgotten that.

>> are you more angry right now at wall street or big government? [laughter] >> lets see, i'm going to go with big government. >> remembers sir, you wonder under oath. >> no more questions are on a. >> both of you may be excused. thank you. [applause] >> he just wants me to move the witness chair. is that okay with the rest of the jury? alright. very good, mr. frank would you like to call your next witness? >> may we me we have mr. george gilmer come to the stand please? [applause] >> please be seated over here.

i have a copy of the latest edition of wealth and poverty. [laughter] do you swear to tell the truth, the whole truth and nothing but the truth so help you wealth and poverty? >> i do. >> thank you for being with us today mr. gilder. you know the prosecution's case is focusing on the fact that many of the deregulation that occurred during the 80's and 90s lead to behaviors that nearly bankrupted the nation. is it your view that if we go back to the legislative era that preceded those two regulations that companies would not be able to get capital from the capital market as has been alleged? >> i believe that during the heyday of venture capital and private equity and hedge funds,

that the united states led the world in industrial creativity and job creation. we were the pioneering exemplary capitalists force in the world, and today wall street has gone off a cliff. and epitomized by charles prince and the city banks. the music he is listening to us the government and that is true of all of wall street. wall street has stopped funding the kinds of companies that steve moore sided and is now involved in all sorts currency speculation on the debauched

daughter -- dollar and incestuous relationships with the treasury and the fed. ..

>> people have to go outside of the united states to seek better regulatory structure. i don't think we're under regulated. we are overregulated. [applause] this over regulation transforms the

entrepreneurial connotation institution into government and did you get to jon corzine as the epitome of the capitalist who unfortunately has come to represent wall street. private equity venture capitalist is to buy a support. michael jensen effect of private equity to find them overwhelmingly positive creating 40 million jobs at a time wall street banished 43,000 and in a transaction.

and is bad with government shuffles and housing finance >> the prosecution has not propose to put wall street behind bars. we look at the different set of governing rules. if you put jon corzine in jail i guess. [laughter] and. [applause] and. >> thank you very much. mr. more? mr. gilmer you have a written eloquently about the virtues of capitalism. can our system of free-market capitalism can that have been or continue

to flourish in? >> it has come to epitomize big banks to large to fail incestuous eight involved with the fed and treasury and white house. [applause] -- should have been allowed to go broke. [applause] >> what me interrupt you. i will concede to much of the incestuous relationship between wall street and deregulation and the congressmen to overseas. is a solution more government and regulation? >> absolutely not. >> the next question about the looming tax increase.

part of the attack on wall street people get rich. any part that is bill of this that we should disrespect? >> if we extracted from the taxpayer -- for you in favor of the bailout of the big banks? >> no. >> chado co.'s? >> no. >> aig? >> no. i was in favor of keeping greenberg ahead of aig for oversight to prevent the $2.7 trillion. that was over regulation. >> raising taxes and capital gains make the capital markets better? >>

[laughter] no. [laughter] >> dividend tax? >> no. >> small businesses. >> of silly not opposing 3.2 excise tax on medical instruments? [laughter] >> last question. we were supposed to overcome these problems with wall street with my client with the dodd/frank bill. said that accomplish what it was supposed to do will? >> it makes incest legal. >> [laughter] and thank you very much. >> and time to spare. >> you should take that on the road. it was like what bill.

[applause] citic day think he helped the defense? >> we will make the best case we can in summation. >> mr. moore? >> i want to take this to the jury right now. >> really? >> no. just joking. [laughter] buy call the honorable steve forbes. [applause] >> mr. "forbes." please be seated. i have a copy of how capitalism will save us by

steve forbes. please put your hand up. do you swear to tell the truth, the whole truth, and nothing but the truth, so help you my best book. [laughter] >> i have another book coming. >> you own a ought to? does that make you enable%? >> a person that other people would like to me. [laughter] as my father liked to say money does not buy happiness, but it helps. do you think getting rich is a noble pursuit? >> real entrepreneurs get to rich by providing needs and

services to others. if you get rich through crony capitalism it is a problem. >> does wall street is there period of excess as the prosecutors allege people are overpaid and greedy? >> to say greed causes the crisis is like gravity causes the airplane crash. there is excess but why did it happen? because of excess money creation by the federal reserve. you would never have an a housing bubble without the excess money. [applause] government failed. wall street responded to the crazy "alice in wonderland"

system congress created. if not so many people go there start with of gold backed dollar a lot of trading profits and opportunities go way. >> you think people who make millions of dollars is excessive we should have a policy to restrict the pay of ceos and major companies? >> absolutely not. i know what politicians to determine. because at the end of the day they are paid more. what does it take to get the talent? we see that in sports. but the talent to run these organizations you have to

pay. many do it because they want something done. john mackey has done very well. i do not be grudge him at all. i like his stores until the checkout counter. [laughter] >> with the prosecution making the case it is more difficult now like wal-mart and google and microsoft and apple mr. gilmer said they cannot get financed any more and entreprenuership has come to look close. do you agree? >> it is a detour. start with sarbanes-oxley.

[applause] and what wall street did look at the massive rise of derivatives came in response to chronic instability interest -- interest rates, by mistakes made by the federal reserve. we have chaos in the markets or try to head to themselves. one of the things that is wonderful extraordinarily adaptability to provide games at pension-fund some and creating new instruments all the time. it is a response to chaos

created by government. >> should wall street or government be on trial? >> that is easy. big government. [applause] >> your witness. >> mr. forbes could i follow condi issue of crony capitalism? referring to the goldman sachs purchase of a.g. of $12 billion of credit default swaps 14 mortgages they would get to up payment if they plant belly up. at the time goldman should have known the only way they would go into default if there was a radical decline of housing prices. it should have known if that happened ag had no reserve

to pay out to the insurance goldman sachs would collect. but yet to say paid-up lot of money. did they know secretary paulson would be presiding over the decision how much they should be receiving and then received 100% payout. is that crony capitalism? >> two parts. should goldman sachs got $0.100 on the dollar? absolutely not. they should have been treated like any other creditor $0.10 on the dollar. with the default swaps is because of hubris. not agreed. they thought with the fancy financial instruments and mathematical equations, they

could do away with risk. so even with defaults they had enough reserves that they would be covered. if everybody says something happens we go for the exit they forgot 2,000 other people went to for the exit. they should have learned that from 1998 disaster. but they thought they could insure against risk which is why they have 40 /1 debt equity ratio. they overestimated their brilliance. >> in your estimation it is not structural but they are slow learners? >> no.

they are innovators. but not all innovation works. some does. some don't. some house to be refined. talk about large paper in the '60s and '70s the commercial paper market dried up. that did not mean commercial paper was bad but if you wanted to sell commercial paper you had to have a credit line to cover it. new things come along just like the highway. innovation. audio and video distribution >> you disagree in the wake

of the financial crisis? >> that an rassman said i may mistake of protecting shareholders. >> he should have amended that statement i made a mistake by not doing what i knew but have the dollar backed by gold we would not have the access in the first place. >> do you acknowledgement this is rations it which private actors lead them to act in ways that are in conflict with public interest? >> of somebody commits fraud that is entirely wrong.

[laughter] >> whether hundreds of millions of dollars with the computer program to execute is said gain they perceived on par with what society gets if they make the same investment? >> it is like early 1980's. most of not survive so if you think you get something to be two seconds quicker try it then you'll be on the lecture circuit. >> i will take at as a nose. >> i will wrap it up. mr. forbes. you may step down. [applause]

>> i will call my next witness peter schiff. [applause] we'll come. please sit in the witness chair. place your hand on how to save yourself and your country. derecognize this? [laughter] do you swear to tell the truth, the whole truth, and nothing but the truth, so help you as you have tried to do in this book? >> absolutely. >> proceed. >> thank you for being here today is it a crime if wall street loses money for their investors in?

>> it is not a crime but it is unfortunate. more is bought on wall street because of regulation >> you had interchange with people from occupy wall street. the movement that brought my clients to trial. do you agree they were misguided? >> i thought they were. this trial is misguided. it is not the investment banks but the federal reserve bank. they're the biggest counterfeiters of money. [applause] destroyers of capital. they finance the massive growth of government spending. in this as what has happened so i went to the people on

occupy wall street know that their anger was misplaced swiss central government and central planning and. >> did you get the message across? [laughter] >> [laughter] i don't think so but to the hundreds of thousands of people on youtube a lot of institutions need to be occupied but not wall street. of course, they made mistakes. they were always occurred up bond alan greenspan alcohol. president bush often accused

wall street of getting drunk but who gave them alcohol? it was alan greenspan. it worked. you should see how people were acting last night. [laughter] >> >> i was not there last night. [laughter] >> it was a good party. >> but least those hangovers wear off. >> when wall street made bad decisions is the people of wall street themselves. >> but not the way it is. >> we have this bubble over wall street.

with too big to fail. now we have the system wall street has been is a device to doesn't that put investor and taxpayer money at risk? >> there is a moral hazard and all but two big to fail there now bigger. but now it will cost more because we have made them more toxic giving them stimulus novocain. >> if we got rid of wall street bailouts wouldn't that be a healthier place or mom and pop stores get more access?

talk about this incestuous relationship isn't that the core of the problem? >> wall street is not filling its obligation it has turned into a casino. capital comes from savings so instead of having savings we counterfeit moving it through wall street. >> i think people pay too much texas and and with everybody else but particularly the rich that they pay their fair share? >> they pay more than their fair share. >> thank you.

>> your witness. [applause] >> is it your view the high payday the word the best and brightest to go in disproportionate numbers? >> they are not as bright as they think they are. >> 44% of princeton graduating class to positions and financial-services. can do think of anything useful all that talent has accomplished for our society? >> we mentioned great success stories like apple that can increase their scale to tap into money through public offerings. but we're wasting talent

because the government subsidizes wall street to the detriment of the real economy. they need to end. if there isn't so much money flowing through all street. the occupiers looked at the government being for sale. that is true but once you give them the influence you cannot blame the private sector using that power for their benefit. but take the power away from government. [applause] then there that oversize profits they may be have people from uc-berkeley or princeton do something more productive.

>> would it be better if they went into engineering, medicine and research? >> we would be better off if people skip going to those universities altogether. [laughter] [applause] you can learn more on the job is it of people who were not confident enough so they ended up teaching. [laughter] [applause] >> that would be me. [laughter] so if i am understand correctly, if wall street gives the power to write their own rules that has a lot of talent and instead of having a fancy degree so as

a witness for the prosecution the case is based that government aides to take away the power they have given to wall street that creates the risk? >> not quite. [laughter] take the power away from government than the power will leave wall street but those on trial should be the government operators who made it possible. wall street is just playing the hand it was dealt take with the subsidies and guarantees and let interest rates go up so there is defending and productive uses of resources and congress cannot run the huge

deficits if nobody is there to finance. [applause] >> you may be excused. >> how much time do i have? ladies and gentlemen, of the jury, a george washington said government. >> he goes first with his closing statement. [laughter] >> is a bit my turn? >> em i out of order? >> >> that he is the fear some master. what we have learned in the last hour is wall street made mistakes and there was

excess but those in who made the mistakes and should pay but government stepped in and became so would vault that it corrupted wall street. eisenhoweisenhow er's said be aware of the military industrial complex we are a wall street complex. that does not work for taxpayers, investors or companies. to why submit it is the villain and the politician. even the prosecution own witnesses say it is the root of evil. if we get rid of the incestuous relationship between government and wall

street, we could see the bull market expansion we have never seen before. if you see my client is guilty and the problem is wall street and not big government evil to a great disservice to the future of this country. thank government directs investment. we know what happens then. look at solyndra then be will have 10,000 of those of polish tisch's direct. rather than wall street. the root of this problem was the housing market. what brought some money down was over investment in housing. why did that happen? why was there a massive over investment?

because of government. fannie mae. freddie mac. fha. federal rules and bake regulators commanded they own mortgage-backed securities. the worst possible investment they could make federal regulators said they had to. that is responsible for bringing it down. this is my message to you. to restrain government put a muzzle and get rid of dodd/frank, regulations, tax increases our economy will flourish again. mom-and-pop investors will make money and government that built the so small we could drown it in the bathtub. [applause] >> closing statement.

>> ladies and gentlemen, of the jury. i agree that government is part of the problem it made the rules to enable them to turn it into a casino. there were big pay-- the drawing talent away from other sectors. the government does need to be reined in and deserve blame. but what should be the rules that govern financial-services? you need to understand the housing bubble was not an accident by government stupidity exclusively. there would have been a housing bubble and financial crisis.

from when do regulation permitted mortgage-backed securities to bundle the loans and sell them. then they did not have a stake if the loan stayed solvent. they already got their pay day. lenders were less built -- vigilant. they made loans because they could sell and bundled and this gate. then they took more risk of lending practices. i had to buy a house with 25 percent down. my kids by than o percent down. people were critical of people borrowing too much and john mccain was

sharply critical. that under estimates what was confronting homeowners. their goal is to send it to the best schools. that is relative of better than the area so that means to send your child to a school of average quality 1/2 to outbid 50% of the other families. said you can sit by and watch your kids go to schools with metal detectors kids going in 20% or get in over your head and hold your place in the education of you.

if this of bad mistake to blame parents. we almost all but have made the same choice. note industrial country has the unregulated financial sector. when loose there is excess of leverage, asset baubles, protracted periods of depression in the wake. the government is that largely faulted but we need smart people at the table but to allow wall street continue business as usual is one of the most important economic handicaps that we face. [applause] >> ladies and gentlemen, of the jury probe is up to you to

decide the guilt or innocence of the supporters of austria and a preponderance of evidence supports a prosecution that wall street and the financial-services industry banks and brokerage firms and hedge funds after the ongoing finance a crisis and guilty of greed corruption excess corruption undue influence and other forms of malfeasance. will the 4% vote and announce the verdict? it can be majority vote it does not require unanimous decision. does anybody have any questions? hello. [inaudible]

>> you have two minutes to answer the question. >> prosecution accused by mayors and -- by nassetta regulations that were bad for the country. [inaudible] >> should we start pacing? >> >> don't leave. the best part is yet to come [inaudible conversations]

♪ >> is this anonymous? and do they feel pressure. >> 10 seconds. you can exchange names and addresses and facebook in your may shin after this

proceeding. >> had reached a verdict? >> unanimously not guilty. [applause] >> unanimous steven moore you win. >> i am not a winner -- a lawyer. >> go drown your sorrows. [laughter] mr. moore you and garo street brothers are not guilty now go enjoy a night in this city of las vegas known as in city we can enjoy a all the pleasures of the insider-trading and the ability to borrow interest-free up to a million-dollar is from the federal reserve case closed.

thank you very much. thank you men and women of the jury. >> you are all dismissed. judge kennedy. thank you. >> joining us arco authors america use sexy is the name of the book. how did you meet? >> we followed each other on

twitter he asked if i wanted to write a book and i said sure. >> i was on a lot of ambien at the time. >> saying "america, you sexy bitch" pleases me to no end. >> so saying how you met is accurate? >> you asked her to co-author over twitter? >> host: why did you agree? >> guest: i just went through a really bad day grout -- break up. despicable men of deprivation and sadness.

>> with american politics and then "daily show" and legitimately i thought it was an interesting ids and i could have no other time to do something over the top and exciting and a serious. >> host: blues day atheist liberal and republican christian read state got together. what is the tone of the book? >> i think it is surprisingly positive. when we had the initial discussion the mailing back and forth we wanted to know we would not make it personal. it does happen a little bit but it is ase experiment to

go together and be friends. >> host: day do view got into the rv and took off. >> and a driver and my cousin john and our speeeleven manager. and started driving through america talking to people with. >> we were both frustrated with politics right now i said the way i fell of of which america is to be on the road for two years. so we need to go on the road. americans are so positive.

some people were negative but we're in a hard time to say yes we are in this together but if the two of us can come together all the zero can be andover the top talk about american politics because at the end of the day is a book for people who are interested in politics. i don't want to preach to the converted but talk to those who are not interested. >> isn't she great? you would never know she was on the campaign trail for two years.

>> host: when you would oblige naked mccain interview people what was their reaction? >> my initial reaction i thought here is a republican talking sense the way i feel they often don't do. but she is sensible, speaks in a coherent way about issues that has relevance the way i can understand. if i was ever going to be buddies with a republican it would be hurt her. i kind of knew who she was because of the last name but it was irrelevant. i met her dad. he does not care for me.

[laughter] >> my eight mother and sister loves him. >> i got a lot of this from senator mccain. >> but he has read half of it and understands we speak to a different audience. i have been accused of being brutally honest i write to understand and we understood. my angelo says we have more in common than we do apart and that is the basis and it is silly and serious. >> host: what was your most memorable stock in the red state? >> i fell in love with prance in missouri.

>> both of us. >> i thought i will make fun of this place and hate this place but it could not have been more fun, the warmer, a gregarious, we went to bet dolly parton stampedes and i never had more fun at a live the theatrical experience. i have been to broadway. she put dustin hoffman touche in. buffalo, horse is, it comes with dinner, you each with your hands. >> they could not have been nicer. they were born default. >> host: is a republican? >> it is family friend the

bible belt. we went to las vegas with the are rated experience and just as awesome of the time and had the existential crisis. >> host: your experience in a blue states? >> i had a nice time in connecticut meeting his family talking about their perspectives. his family a weren't not fans over dinner and i thought we showed them a good time and his friends did not like me. what ever. you have to face and the

stereotypes and prejudice. >> having spent time on the road with a lot of republicans i can confirm republicans are lot more fun than democrats. >> have your views changed? >> come on. >> i got into more guns. her brother taught me to shoot it. i like that. >> he is behind you. he was in the marines. >> not changing my mind but to hear the other person point* to view. >> more workers waste is a and articulate. >> my mind was changed on

marijuana legalization. at the time we met to a lot of people that gave good case is economically. when i read of fed decriminalization and imprisoning people might view has been changed which is scary because it goes against republican orthodoxy. >> william f. buckley was a big supporter. >> yes. and mario cuomo. but the bloomberg? but of all the issues i had

this big macs studying the effects therapeutic for ptsd victims and makes a compelling case. >> why all of garden? >> i love the olive garden. i eat their all the time. we love fast-food and chain hotels. the basis of our relationship. [laughter] wrinkles, burger king, red roof inn, soda. we do not care about our house. >> host: the title? >> that was hers. i take no credit. >> we were in the capital which fathers in turn -- in terms the statue of freedom and

said the sun never sets on freedom and i said ameritech is a sexy bitch that is why. we all started to laugh. >> to say i find the title charming. >> host: what is good goal of the book? big people should least start having the conversation. what do i believe? not for "politico" but those who care about the country but have no way in to start

talking about it. >> it nears my own political education. make it is fortunate came for family heavily involved. i was a the democratic by being born into it but i never would sought about it until i was older or if i believe what i think i believe. it is about having a good time and ask questions. >> i feel my cast in politics is with a different audience. we spoke at many colleges. everything is so polarized. they don't want to use their

voice why? wheat can use to where -- humor to get the message across is powerful. >> host: this is your third book? >> my first was a children's book and the second was 36 politics. >> this is also my third book. the second is called you are not doing it right to. >> host: "america, you sexy bitch" a love letter to freedom. >> thank you. >> we had a lot of discussion -- discussions i was not happy with the product. in the movie there is a process and out of necessity

time lines are rearranged it is a true story of what happened. regarding vetting reroute the process and senator mccain determined who he wanted to pick we have the realization we could not win with any of the candidates with the election circumstances to be outspent by $200 million. president bush approval rating was in the thirties. barack obama's speaking to crowds of hundreds of thousands in europe there was a fervor trying to figure out how to win. i said we should take a look at sarah palin from alaska.

>> are you proud of that moment? >> the moment freezes and slows down in my brain. [laughter] i was at the jersey shore. i remember every aspect of the moment. the smell of long beach, the salt air, the cars in front of the house, i called rick davis and said we should look at sarah palin. said vetting done i said it is very important that she be fully and complete the vetted. can redo tender 20 lawyers

in a few days? a documentary can be done on this alone. but i do want to make a point*. there is a lot of context. the first part was tax in medical records. the second part depicted in the movie we have a discussion how the campaign will run. how your life will change. the third part is the question her the fitness for office and the fourth part the interview with john mccain himself. what they said to each other is unknown to me. just to them. the questionnaire and the results we did not haveth